Modi-Trump Meet Benefits India And Is Neutral For Indian Industry

The Modi-Trump meeting is poised to be beneficial for India and, at worst, neutral for Indian industry, given that the US reciprocal tariff impositions are expected only in April and will have limited impact.A major takeaway from the deal is the strengthening of India's energy security. India, which sources crude from multiple countries, has advanced refineries with high Nelson Complexity Index (NCI), enabling efficient processing of complex crude. In recent years, India has increasingly relied on Russian crude due to cost-effectiveness and ease of transport. With recent sanctions limiting access to Russian crude, the furthering of purchase of American crude by Indian refiners is a strategic advantage. India exported $4.1 billion worth of refined petroleum products to the US in 2024, making this deal particularly significant.India's trade with the US remains robust. In 2024, India exported goods worth $73.7 billion while importing $39 billion. Notably, for 75% of US exports to India, the average tariff is below 5%..The meeting also reinforces defense and nuclear cooperation. India urgently needs to replace its aging fleet of deep-penetration fighter jets — Mirage 2000s and Jaguars — which will be phased out in the coming years. A government-to-government agreement will see India acquiring F-35 stealth aircraft, with maintenance largely handled by Hindustan Aeronautics Ltd. in India. While the exact number of aircraft is yet to be determined, the Indian Air Force currently operates only 30 squadrons against a required strength of 42, each comprising 16–18 aircraft..Modi Meets Trump: Trade To Defence Deals And 26/11 Mastermind Extradition, Key Takeaways From Bilateral Talks.The US and Russia showcased their respective fifth generation Lockheed Martin F-35 and Sukhoi Su-57 aircraft at the recently concluded Aero India 2025. By opting for the F-35s, India signals its commitment to its own Advanced Medium Combat Aircraft (AMCA) project, being developed by the Aeronautical Development Agency and to be manufactured by HAL. For AMCA’s scheduled 2034 production start, India requires US support, particularly for GE Aerospace engines..Further bolstering energy security, India has secured US support for modular nuclear power stations. With India seeking public and private sector participation in nuclear power, the deal ensures technology and parts supply. India imported nuclear power equipment worth $3.75 billion in FY24, with $2.8 billion procured between April and November 2024 alone.The Modi-Trump meeting also reaffirms the commitment to an alternative supply chain route running from India through Israel and Italy to the US, incorporating ports, railways, and undersea cables — an initiative first agreed upon at the India G20 Summit.Additionally, both leaders are pushing for greater collaboration in space, AI, biotech, and technology sectors.Despite the looming reciprocal tariff directive, its impact on India is expected to be minimal. The US applies an average Most Favored Nation (MFN) tariff of 5% on agricultural goods, while India’s MFN tariff averages 39%. India imposes a 100% tariff on US motorcycles, whereas the US charges just 2.4% on Indian motorcycles — though trade in this sector remains negligible. In FY24, India imported $1 billion worth of edible fruits from the US. Trump is expected to introduce exemptions for auto, pharmaceutical and semiconductor sectors to avoid raising US manufacturing costs.India aims to increase bilateral trade fivefold by 2030. The trade surplus with the US is unlikely to turn into a deficit. Instead, the US should benefit as its exports to India rise in line with the 2030 target..Indian Sectors That Could Face The Heat From Trump's Reciprocal Tariffs

Modi-Trump Meet Benefits India And Is Neutral For Indian Industry

Despite the Trump's looming reciprocal tariff directive, its impact on India is expected to be minimal.

NDTV Profit

NDTV Profit

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